ABSTRACT
The macroeconomic economic concepts and relationships presented in this chapter can be used to understand unfolding economic events. Macroeconomic environments can significantly influence the success or failure of corporate business plans and economy-related legislation. Therefore, creating meaningful strategies and prudent legislation implies competent consideration of possible future economic environments. Important to remember are two guiding principles: (1) macroeconomic analyses should focus on the simultaneous movements of the three major markets, and (2) most macroeconomics analyses are conducted or can be improved by using the basic rules of supply and demand. Together, these two principles provide the basis for logical and informed decisions about the effect external shocks can have on a nation's GDP price index (GDP-PI), inflation rate, real gross domestic product (RGDP) and nominal gross domestic product (NGDP), unemployment and employment rates, real and nominal credit costs, as well as real and nominal exchange rates.
